Everything will be digitised

Wednesday, June 7, 2017John Churchill and Flemming J. Mikkelsen

Digitisation is transforming every industry and it will transform A.P. Moller – Maersk too in the coming years, with the creation of new products, better service for customers, operations that are more efficient and new sources of revenue.

“Digitisation is for all of us, from the CEO to the youngest man on the deck,“ says Ibrahim Gokcen about the digital vision for the Transport & Logistics division. "We all need to talk the same language. That is the only way we can succeed. We have to use our strengths to the maximum. That means multiple parts of the organisation working together to shape our digital future. This is being done in a coordinated way with the help of a single joint agenda.”

Gokcen is A.P. Moller - Maersk’s first ever Chief Digital Officer. He has been with the company for a year, and was appointed CDO a few months ago. He says Maersk is ready for the digital journey, the only obstacle being time.

“We have to get started, do things, learn and then take the next steps. While we need to be patient, we also need to continue experimenting. We cannot achieve a perfect design from the beginning,” says Gokcen. “Digitisation is a new area of endeavour and as such it can be a little uncomfortable at times. Nevertheless, I can see that everyone is open to understanding how we can deliver results, while adapting to what for many may be a new way of working.”

Be patient

Before joining Maersk, Gokcen helped lead a similar transformation at General Electric, which he describes as “a traditional industrial company that started to think of digitisation as a clear competitive advantage, and ultimately as a path to survival.” It is the same with Maersk. However, he is quick to underline that seven years later, digital transformation is still a work in progress at General Electric.

“It takes time, so we must be patient. We will of course see results along the way and I’m really excited about the journey. It’s a great challenge for all of us and it will make us much better as professionals, as leaders and also as a company,” he says.

Digital innovation is one of four Must Win Battles in the Transport & Logistics division’s new ‘Stronger together’ strategy, where the mindset is that the five brands – Maersk Line, APM Terminals, Damco, Svitzer and Maersk Container Industry – will perform better as one business.

Digitising container logistics

As laid out by CEO of A.P. Moller - Maersk, Søren Skou, digitisation is an important pillar for growth in 2017 and digital innovation will be vital in creating and expanding synergies between the five brands that enable Maersk to deliver on the new vision of becoming the global integrator of container logistics.

It takes time, so we must be patient. We will of course see results along the way and I’m really excited about the journey. It’s a great challenge for all of us and it will make us much better as professionals, as leaders and also as a company.

Speaking to analysts and investors at Capital Markets Day in Copenhagen, Chief Strategy & Transformation Officer Jakob Stausholm summarised the importance of digitisation and Maersk’s approach to its implementation when he said “everything that can be digitised in our industry will be digitised.”

Gokcen says it will be important for Maersk not to stray off course amid the excitement that inevitably will accompany each new step in Maersk’s digital transformation. “Our advantage is that no one knows our industry better than we do,” he says.

“Our success will depend on how we combine and expand our current relatively small digital capability with our deep knowledge of the container transportation and logistics business. So, while technology will play a big role in this process, our domain expertise will allow us to play and win in the race to digitise. We cannot afford to forget where our advantage comes from. Maintaining our focus is critical.”

The road to achieving the vision

It will also depend on Maersk’s ability to continue filling the ranks of its digital organisation – expected to grow to 100 people by the end of the year – with data scientists and engineers, product developers, product managers, user experience specialists and more. However, just as important as their numbers, will be how they work within the business.

What is digitisation, anyway?

Every company seems to be “going digital” these days and what it means is a hot topic of discussion. Is it a reference to technology? To doing stuff online? To apps?

According to a report from McKinsey & Co. entitled “What ‘digital’ really means,” it holds different meanings for different companies, but should be seen less as a thing (like technology, for example) and more as a way of doing things that:

Creates value at the frontiers of the business. For Maersk, this could be the data and connectivity of our assets and the emerging Internet of Things (IoT) capability this will provide

Creates value in the core. For Maersk, this relates to operational performance and the customer experience, which digital capabilities and products will have a huge impact on

Create value by building foundational capabilities that support the entire structure. For Maersk, establishing the position of Chief Digital Officer, implementing SCRUM and other agile working methods, innovation campaigns and collaboration with start-ups are examples of this

Greater focus is being put on integrating digitisation within the actual business thereby eliminating any disconnect that exists between the two by linking the digital teams with teams in sales, customer service and operations. This is where the deepest understanding of the core business lies, and as such, it houses the greatest opportunity for curious digital natives to uncover value and digitally transform the company as well as our industry.

“No single person or team can execute our digital portfolio or transformation and it most certainly isn’t just about the people in the digital teams,” says Gokcen. “If we are going to get anywhere it will be through cooperation across the entire organisation and with our partners,” he says.

In doing so, he is referring to Maersk’s recent agreements with the likes of IBM, with a view to exploring the benefits of blockchain technology for Maersk’s trade digitisation efforts, and with Microsoft, whose Azure platform will be used by all Maersk brands in developing software applications.

Never forget the customer

Finally, if the message from management is to collaborate, be open to digital ideas and never forget what the Maersk advantage is, they are equally insistent that every employee never forget who they are doing all this for: the customer.

“Whatever innovation we come up with, it has to be backed by our customers and the market. We can build amazing technology, but if our customers – and our own people – don’t use it, then we got it wrong. And we need everyone to learn to think that way, putting customers at the start,” says Gokcen, before adding: “And since this is innovation, we also need to have fun.”

A.P. Moller - Maersk

A.P. Moller - Maersk is an integrated transport and logistics company with multiple brands and is a global leader in container shipping and ports. Including a stand-alone Energy division, the company employs roughly 88,000 employees across operations in 130 countries.